Edwards' Nonprofit Kept His Profile High
Friday, June 22, 2007; 2:41 AM
CHAPEL HILL, N.C. -- After losing the race for the White House in 2004, John Edwards needed a way to stay in the spotlight. The longtime trial attorney was out of the Senate, suddenly without the platform and campaign funds that come with serving in Congress. And it was much too soon to declare his candidacy for the Democratic nomination in 2008. And so, in 2005, Edwards and his staff created the Center for Promise and Opportunity, a nonprofit under federal tax law. He was the honorary chairman, and its five officers all had worked for his presidential campaign.
Well before any potential rivals had set up presidential exploratory committees, the first major step in raising money toward a bid for the White House, the center appeared to pay for Edwards to travel to New Hampshire and several delegate-rich states and maintain a high profile nationally _ all without worrying about the limits imposed by federal election laws.
At the same time, the center may have stretched the limits of tax law, which prohibits political nonprofits from having a primary purpose of supporting or opposing candidates.
"It's possible that the 'opportunity' the center was promoting was only John Edwards' opportunity _ his opportunity to run for president," said Massie Ritsch, a spokesman for the nonpartisan Center for Responsive Politics.
The Edwards campaign describes this period as one in which Edwards spent his time and energy engaging Americans in the fight against poverty, the North Carolina Democrat's signature issue.
"Edwards led these efforts to raise awareness about poverty and other obstacles to equal opportunity, explore ideas to meet those challenges, and test some of them in the real world," said Eric Schultz, a spokesman for Edwards. "One of the ways he did that was through the Center for Promise and Opportunity."
However, relying on a nonprofit instead of a presidential exploratory committee or political action committee to lead a policy crusade offered advantages to Edwards.
The Federal Election Commission regulates exploratory committees and PACs. With the nonprofit, there were no limits on the amount of money Edwards could raise, either from individual donors or overall.
The center also didn't have to disclose nearly as much information about how it was spending the money or where it came from, and it has been able to keep that limited amount of information under wraps for much longer.
Political action committees must update the FEC on their finances every quarter, and an exploratory committee must document its fundraising and spending with federal regulators not long after a potential candidate formally enters the race. Edwards' nonprofit filed its 2005 annual report with the Internal Revenue Service in November 2006 and has yet to file its 2006 report, having asked for an extension beyond the May deadline.
The campaign declined to release the figures that will be in the 2006 report to The Associated Press.
The center raised and spent $1.3 million in 2005, according to the IRS report, and it employed several staff members who now work for Edwards' 2008 campaign. The center also appears to have paid for some of Edwards' travels across the country that year.